Any IRS audit can be scary and intimidating, but audits are especially difficult when you know that there is a problem with your personal or business taxes. Consulting with an attorney before an audit is always a good idea, but hiring a Baltimore eggshell audit lawyer is especially important. Your IRS audit lawyer will help you navigate the situation as smoothly as possible to avoid creating further problems.
Eggshell audit is an informal term that refers to the expression “walking on eggshells,” not an official type of audit. It refers to a situation where a taxpayer is being audited and has information they do not want the IRS to discover, the IRS suspects the taxpayer may have committed fraud, or both. An audit is a civil process, but an eggshell audit has the potential to turn into a criminal investigation, and the taxpayer should hire a Baltimore attorney. For example, a taxpayer may have significantly understated their income, and the IRS knows the income was underreported and is trying to determine whether this was a mistake or intentional fraud. If the IRS concludes that the taxpayer was negligent, they can owe back taxes and a penalty. If the IRS finds evidence of criminal tax fraud, the taxpayer could face a much larger penalty as well as potential prison time.
If a taxpayer is being audited and has any information they are worried about the IRS finding, they should talk to an attorney as soon as possible. Ideally, a taxpayer should look for a lawyer with experience in both IRS audits and criminal tax defense. An eggshell audit can have serious, life-altering consequences. Even the best-case scenario often involves owing back taxes and a penalty for negligence. During a sensitive audit, the taxpayer is usually anxious about the outcome, which makes deciding what to say even more difficult. Lying to the IRS can lead to more serious penalties, but the taxpayer should not admit to anything unnecessary. An attorney could help their client determine which questions they need to answer and which documents they need to provide.
Communication with an attorney is privileged, which means the taxpayer can discuss their concerns about the audit freely. This allows the attorney to plan for possible issues the IRS might find. An experienced audit and tax defense lawyer will know how to look for signs that the auditors are preparing to refer the case to a criminal investigation, which allows for further planning. If the eggshell audit does lead to criminal charges, an attorney in Baltimore could defend their client during those proceedings as well.
An IRS audit is never pleasant, but it becomes even more difficult when you know that something is wrong with your personal or business tax return. In these sensitive cases, hiring a Baltimore eggshell audit lawyer is essential. An attorney will help you avoid mistakes like unnecessary disclosures that can hurt your case. This minimizes the chance that your audit will turn into a criminal investigation. Our team has experience in both audit and criminal tax defense, so we are prepared to help you get the best possible outcome in your eggshell audit case. Contact Whiteford Tax Defense to discuss your options today.